If a price ceiling is set above the equilibrium price, then
A. prices will fall as soon as the ceiling price is abolished.
B. prices will remain the same (not rise) when the price ceiling is lifted.
C. equilibrium price and ceiling prices are two totally different concepts and hence do not affect each other.
D. prices will begin to rise rapidly when the price ceiling is lifted.
B. prices will remain the same (not rise) when the price ceiling is lifted.
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Which of the following is NOT a characteristic of a perfectly competitive long-run equilibrium?
A) Firms are earning zero profits. B) Price equals marginal cost. C) Price equals long-run minimum average cost. D) Firms are producing on the downward sloping portions of their short-run average cost curves.
The wages for Nike workers increases. At the same time, we see the price for Adidas shoes increase. How does this affect the market for Nike shoes?
a. The demand curve will shift to the left; the supply curve will shift to the left b. The demand curve will shift to the left; the supply curve will shift to the right c. The demand curve will shift to the right; the supply curve will shift to the left d. The demand curve will shift to the right; the supply curve will shift to the right
A dominant strategy
A. results in the best outcome for a player if other players also play the same strategy. B. is the best strategy for a player, regardless of the strategy chosen by other players. C. is present in every game. D. is identical to a Nash equilibrium.
The law of diminishing returns
a. explains why marginal cost eventually increases as output expands. b. implies that average fixed cost will remain unchanged as output expands. c. is true for physical production activities but not for activities such as studying. d. applies to a capitalist economy but would be irrelevant if the means of production were owned by the state.